throbber
Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 1 of 14
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`
`________________________________________________
`
`
`
`
`
`
`
`
`:
`SECURITIES AND EXCHANGE COMMISSION, :
`
`
`
`
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`
`
`v.
`
`
`
`:
`:
`:
`: Civil Action No. 23-cv-00022
`:
`
`:
`
`
`
`
`COOPER J. MORGENTHAU,
`:
`
`
`
`
`
`
`
`
`
`:
`
`Defendant.
`
`
`
`
`
`________________________________________________:
`
`[PROPOSED] JUDGMENT AS TO DEFENDANT COOPER J. MORGENTHAU
`
`
`
`The Securities and Exchange Commission having filed a Complaint and Defendant
`
`Cooper J. Morgenthau having entered a general appearance; consented to the Court’s jurisdiction
`
`over Defendant and the subject matter of this action; consented to entry of this Judgment; waived
`
`findings of fact and conclusions of law; and waived any right to appeal from this Judgment:
`
`I.
`
`
`
`
`
`IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
`
`permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the
`
`Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
`
`promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of
`
`interstate commerce, or of the mails, or of any facility of any national securities exchange, in
`
`connection with the purchase or sale of any security:
`
`(i)
`
`to employ any device, scheme, or artifice to defraud;
`
`
`
`1
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 2 of 14
`
`(ii)
`
`to make any untrue statement of a material fact or to omit to state a material fact
`
`
`
`
`
`necessary in order to make the statements made, in the light of the circumstances
`
`under which they were made, not misleading; or
`
`(iii)
`
`to engage in any act, practice, or course of business which operates or would
`
`
`
`operate as a fraud or deceit upon any person.
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
`
`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
`
`receive actual notice of this Judgment by personal service or otherwise: (a) Defendant’s officers,
`
`agents, servants, employees, and attorneys; and (b) other persons in active concert or
`
`participation with Defendant or with anyone described in (a).
`
`II.
`
`
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
`
`permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933
`
`(the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any
`
`means or instruments of transportation or communication in interstate commerce or by use of the
`
`mails, directly or indirectly:
`
`(i)
`
`(ii)
`
`
`
`
`
`
`
`to employ any device, scheme, or artifice to defraud;
`
`to obtain money or property by means of any untrue statement of a material fact
`
`or any omission of a material fact necessary in order to make the statements
`
`made, in light of the circumstances under which they were made, not misleading;
`
`or
`
`(iii)
`
`to engage in any transaction, practice, or course of business which operates or
`
`
`
`would operate as a fraud or deceit upon the purchaser.
`
`2
`
`
`
`
`
`
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 3 of 14
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
`
`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
`
`receive actual notice of this Judgment by personal service or otherwise: (a) Defendant’s officers,
`
`agents, servants, employees, and attorneys; and (b) other persons in active concert or
`
`participation with Defendant or with anyone described in (a).
`
`III.
`
`
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
`
`permanently restrained and enjoined from violating Section 13(b)(5) of the Exchange Act [15
`
`U.S.C. § 78m(b)(5)] and Rule 13b2-1 [17 CFR § 240.13b2-1] by knowingly circumventing or
`
`knowingly failing to implement a system of internal accounting controls or by directly or
`
`indirectly falsifying or causing to be falsified any books, records, or accounts subject to Section
`
`13(b)(2) of the Exchange Act [15 U.S.C. § 78m(b)(2)].
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
`
`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
`
`receive actual notice of this Judgment by personal service or otherwise: (a) Defendant’s officers,
`
`agents, servants, employees, and attorneys; and (b) other persons in active concert or
`
`participation with Defendant or with anyone described in (a).
`
`IV.
`
`
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
`
`permanently restrained and enjoined from violating Exchange Act Rule 13b2-2(a) and (b) [17
`
`C.F.R. § 240.13b2-2(a) and (b)] by, while acting as an officer or director of an issuer:
`
`A) directly or indirectly making or causing to be made a materially false or misleading
`
`statement, or omitting to state or causing another person to omit to state any material
`
`
`
`3
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 4 of 14
`
`fact necessary in order to make statements made, in light of the circumstances under
`
`which such statements were made, not misleading, to an accountant in connection
`
`with (i) any required audit, review or examination of the financial statements of an
`
`issuer, or (ii) the preparation or filing of any document or report required to be filed
`
`with the Commission; or
`
`B) directly or indirectly taking any action to coerce, manipulate, mislead, or
`
`fraudulently influence an independent public or certified public accountant engaged
`
`in the performance of an audit or review of the financial statements of an issuer that
`
`are required to be filed with the Commission, if Defendant knows or should know
`
`that such action, if successful, could result in rendering the issuer’s financial
`
`statements materially misleading.
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
`
`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
`
`receive actual notice of this Judgment by personal service or otherwise: (a) Defendant’s officers,
`
`agents, servants, employees, and attorneys; and (b) other persons in active concert or
`
`participation with Defendant or with anyone described in (a).
`
`V.
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
`
`permanently restrained and enjoined from violating Exchange Act Rule 13a-14 [17 C.F.R.
`
`§ 240.13a-14] by filing or causing to be filed any annual or quarterly report on behalf of any
`
`issuer required to be filed with the Commission pursuant to Section 13(a) of the Exchange Act
`
`and the rules and regulations promulgated thereunder, which contains a certification required by
`
`Rule 13a-14 [17 C.F.R. § 240.13a-14] that includes an untrue statement of material fact; or fails
`
`
`
`4
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 5 of 14
`
`to include, in addition to the information required to be stated in such certification, such further
`
`material information as may be necessary to make the required statements, in light of the
`
`circumstances under which they were made, not misleading; or fails to disclose any information
`
`required to be disclosed therein.
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
`
`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
`
`receive actual notice of this Judgment by personal service or otherwise: (a) Defendant’s officers,
`
`agents, servants, employees, and attorneys; and (b) other persons in active concert or
`
`participation with Defendant or with anyone described in (a).
`
`VI.
`
`
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section
`
`21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and/or Section 20(e) of the Securities Act
`
`[15 U.S.C. § 77t(e)], Defendant is prohibited from acting as an officer or director of any issuer
`
`that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C.
`
`§ 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C.
`
`§ 78o(d)].
`
`VII.
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, upon motion of the
`
`Commission, the Court shall determine whether it is appropriate to order disgorgement of ill-
`
`gotten gains and/or a civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C.
`
`§ 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)] and, if so, the
`
`amount(s) of the disgorgement and/or civil penalty. If disgorgement is ordered, Defendant shall
`
`pay prejudgment interest thereon, calculated from July 1, 2021, based on the rate of interest used
`
`
`
`5
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 6 of 14
`
`by the Internal Revenue Service for the underpayment of federal income tax as set forth in 26
`
`U.S.C. § 6621(a)(2). In connection with the Commission’s motion for disgorgement and/or civil
`
`penalties, and at any hearing held on such a motion: (a) Defendant will be precluded from
`
`arguing that he did not violate the federal securities laws as alleged in the Complaint; (b)
`
`Defendant may not challenge the validity of the Consent or this Judgment; (c) solely for the
`
`purposes of such motion, the allegations of the Complaint shall be accepted as and deemed true
`
`by the Court; and (d) the Court may determine the issues raised in the motion on the basis of
`
`affidavits, declarations, excerpts of sworn deposition or investigative testimony, and
`
`documentary evidence, without regard to the standards for summary judgment contained in Rule
`
`56(c) of the Federal Rules of Civil Procedure. In connection with the Commission’s motion for
`
`disgorgement and/or civil penalties, the parties may take discovery, including discovery from
`
`appropriate non-parties.
`
`VIII.
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of
`
`exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the
`
`allegations in the complaint are true and admitted by Defendant, and further, any debt for
`
`disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
`
`Judgment or any other judgment, order, consent order, decree or settlement agreement entered in
`
`connection with this proceeding, is a debt for the violation by Defendant of the federal securities
`
`laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the
`
`Bankruptcy Code, 11 U.S.C. §523(a)(19).
`
`
`
`6
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 7 of 14
`
`IX.
`
`
`
`
`
`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
`
`jurisdiction of this matter for the purposes of enforcing the terms of this Judgment.
`
`
`Dated: ____________________, 2023
`
`
`
`____________________________________
`UNITED STATES DISTRICT JUDGE
`
`
`
`7
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 8 of 14
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`SECURITIES AND EXCHANGE COMMISSION,
`
`Plaintiff,
`
`v.
`
`No. 23 Civ. ___________
`
`COOPER J. MORGENTHAU,
`
`Defendant.
`
`CONSENT OF DEFENDANT COOPER J. MORGENTHAU
`
`1.
`
`Defendant Cooper J. Morgenthau (“Defendant”) waives service of a summons
`
`and the complaint in this action, enters a general appearance, and admits the Court’s jurisdiction
`
`over Defendant and over the subject matter of this action.
`
`2.
`
`Defendant has entered into a written agreement to plead guilty to criminal conduct
`
`relating to certain matters alleged in the complaint in this action. Specifically, in United States v.
`
`Cooper J. Morgenthau, Crim. No. [TBD] (S.D.N.Y. 2023), Defendant agreed to plead guilty to a
`
`violation of Title 18, United States Code, Section 1343. This Consent shall remain in full force
`
`and effect regardless of the existence or outcome of any further proceedings in United States v.
`
`Cooper J. Morgenthau.
`
`3.
`
`Defendant hereby consents to the entry of the Judgment in the form attached
`
`hereto (the “Judgment”) and incorporated by reference herein, which, among other things:
`
`a. Permanently retrains and enjoins Defendant from violations of Section 17(a)
`
`of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)],
`
`Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934
`
`1
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 9 of 14
`
`(“Exchange Act”) [15 U.S.C. §§ 78j(b), 78m(b)(5)] and Rules 10b-5, 13b2-1,
`
`13b2-2(a) and (b), and 13a-14 thereunder [17 C.F.R. §§ 240.10b-5, 240.13b2-
`
`1, 240.13b2-2(a) and (b), 240.13a-14]; and
`
`b. bars Defendant from acting as an officer or director of any issuer that has a
`
`class of securities registered pursuant to Section 12 of the Exchange Act [15
`
`U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the
`
`Exchange Act [15 U.S.C. § 78o(d)].
`
`4.
`
`Defendant agrees that, upon motion of the Commission, the Court shall determine
`
`whether it is appropriate to order disgorgement of ill-gotten gains and/or a civil penalty pursuant
`
`to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange
`
`Act [15 U.S.C. § 78u(d)(3)] and, if so, the amount(s) of the disgorgement and/or civil penalty.
`
`The Defendant further understands that, if disgorgement is ordered, Defendant shall pay
`
`prejudgment interest thereon, calculated from July 1, 2021, based on the rate of interest used by
`
`the Internal Revenue Service for the underpayment of federal income tax as set forth in 26
`
`U.S.C. § 6621(a)(2). Defendant further agrees that in connection with the Commission’s motion
`
`for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a) Defendant
`
`will be precluded from arguing that he did not violate the federal securities laws as alleged in the
`
`Complaint; (b) Defendant may not challenge the validity of this Consent or the Judgment;
`
`(c) solely for the purposes of such motion, the allegations of the Complaint shall be accepted as
`
`and deemed true by the Court; and (d) the Court may determine the issues raised in the motion
`
`on the basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony,
`
`and documentary evidence, without regard to the standards for summary judgment contained in
`
`Rule 56(c) of the Federal Rules of Civil Procedure. In connection with the Commission’s
`
`2
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 10 of 14
`
`motion for disgorgement and/or civil penalties, the parties may take discovery, including
`
`discovery from appropriate non-parties.
`
`5.
`
`Defendant waives the entry of findings of fact and conclusions of law pursuant to
`
`Rule 52 of the Federal Rules of Civil Procedure.
`
`6.
`
`Defendant waives the right, if any, to a jury trial and to appeal from the entry of
`
`the Judgment.
`
`7.
`
`Defendant enters into this Consent voluntarily and represents that no threats,
`
`offers, promises, or inducements of any kind have been made by the Commission or any
`
`member, officer, employee, agent, or representative of the Commission to induce Defendant to
`
`enter into this Consent.
`
`8.
`
`Defendant agrees that this Consent shall be incorporated into the Judgment with
`
`the same force and effect as if fully set forth therein.
`
`9.
`
`Defendant will not oppose the enforcement of the Judgment on the ground, if any
`
`exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby
`
`waives any objection based thereon.
`
`10.
`
`Defendant waives service of the Judgment and agrees that entry of the Judgment
`
`by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms
`
`and conditions. Defendant further agrees to provide counsel for the Commission, within thirty
`
`days after the Judgment is filed with the Clerk of the Court, with an affidavit or declaration
`
`stating that Defendant has received and read a copy of the Judgment.
`
`11.
`
`Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted
`
`against Defendant in this civil proceeding. Defendant acknowledges that no promise or
`
`representation has been made by the Commission or any member, officer, employee, agent, or
`
`
`
`3
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 11 of 14
`
`representative of the Commission with regard to any criminal liability that may have arisen or
`
`may arise from the facts underlying this action or immunity from any such criminal liability.
`
`Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding,
`
`including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
`
`that the Court’s entry of a permanent injunction may have collateral consequences under federal
`
`or state law and the rules and regulations of self-regulatory organizations, licensing boards, and
`
`other regulatory organizations. Such collateral consequences include, but are not limited to, a
`
`statutory disqualification with respect to membership or participation in, or association with a
`
`member of, a self-regulatory organization. This statutory disqualification has consequences that
`
`are separate from any sanction imposed in an administrative proceeding. In addition, in any
`
`disciplinary proceeding before the Commission based on the entry of the injunction in this
`
`action, Defendant understands that he shall not be permitted to contest the factual allegations of
`
`the complaint in this action.
`
`12.
`
`Defendant understands and agrees to comply with the terms of 17 C.F.R.
`
`§ 202.5(e), which provides in part that it is the Commission’s policy “not to permit a defendant
`
`or respondent to consent to a judgment or order that imposes a sanction while denying the
`
`allegations in the complaint or order for proceedings.” As part of Defendant’s agreement to
`
`comply with the terms of Section 202.5(e), Defendant acknowledges the plea agreement for
`
`related conduct described in paragraph 2 above, and: (i) will not take any action or make or
`
`permit to be made any public statement denying, directly or indirectly, any allegation in the
`
`complaint or creating the impression that the complaint is without factual basis; (ii) will not
`
`make or permit to be made any public statement to the effect that Defendant does not admit the
`
`allegations of the complaint, or that this Consent contains no admission of the allegations;
`
`4
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 12 of 14
`
`(iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action
`
`to the extent that they deny any allegation in the complaint; and (iv) stipulates for purposes of
`
`exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, that the
`
`allegations in the complaint are true, and further, that any debt for disgorgement, prejudgment
`
`interest, civil penalty or other amounts due by Defendant under the Judgment or any other
`
`judgment, order, consent order, decree or settlement agreement entered in connection with this
`
`proceeding, is a debt for the violation by Defendant of the federal securities laws or any
`
`regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy
`
`Code, 11 U.S.C. §523(a)(19). If Defendant breaches this agreement, the Commission may
`
`petition the Court to vacate the Judgment and restore this action to its active docket. Nothing in
`
`this paragraph affects Defendant’s: (i) testimonial obligations; or (ii) right to take legal or
`
`factual positions in litigation or other legal proceedings in which the Commission is not a party.
`
`13.
`
`Defendant hereby waives any rights under the Equal Access to Justice Act, the
`
`Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to
`
`seek from the United States, or any agency, or any official of the United States acting in his or
`
`her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees,
`
`expenses, or costs expended by Defendant to defend against this action. For these purposes,
`
`Defendant agrees that Defendant is not the prevailing party in this action since the parties have
`
`reached a good faith settlement.
`
`14.
`
`In connection with this action and any related judicial or administrative
`
`proceeding or investigation commenced by the Commission or to which the Commission is a
`
`party, Defendant: (i) agrees to appear and be interviewed by Commission staff at such times and
`
`places as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile
`
`5
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 13 of 14
`
`transmission of notices or subpoenas issued by the Commission for documents or testimony at
`
`depositions, hearings, or trials, or in connection with any related investigation by Commission
`
`staff; (iii) appoints Defendant’s undersigned attorney as agent to receive service of such notices
`
`and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on
`
`service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local
`
`rules, provided that the party requesting the testimony reimburses Defendant's travel, lodging, and
`
`subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consents to
`
`personal jurisdiction over Defendant in any United States District Court for purposes of
`
`enforcing any such subpoena.
`
`22.
`
`Defendant agrees that the Commission may present the Judgment to the Court for
`
`signature and entry without further notice.
`
`6
`
`

`

`Case 1:23-cv-00022-NRB Document 3 Filed 01/03/23 Page 14 of 14
`
`/s/ Michael Paul Bowen
`
`

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket